Average monthly car payments are now brushing up against $750, turning what used to be a manageable line item into one of the most punishing pieces of the household budget. The shift is not just about pricier vehicles, it reflects a mix of higher interest rates, longer loan terms and borrowers stretching their finances to keep up with the cars they feel they need.

As payments climb, the gap between what people drive and what they can realistically afford is widening, especially for buyers with weaker credit. The data shows a market where typical new-car payments are approaching $748, used-car costs are not far behind, and a growing share of drivers are signing up for $1,000 or more every month just to stay on the road.

Average payments are pushing toward $750 a month

The clearest sign of how expensive car ownership has become is the new-car payment itself, which has moved from the low $700s to the high $700s in just a couple of years. In Q3 2025, the average monthly bill for a new vehicle reached $748, a figure that would have sounded extreme not long ago but is now the going rate for many mainstream models. That level lines up with other recent estimates that peg the typical new-car payment at roughly the same amount, underscoring that this is not an outlier but the new normal across the market.

What stands out in the data is how quickly those payments have climbed. In Q3 2023, the average new-car payment sat at $726, then rose to $742 by Q4 2024, before landing at $748 in 2025. Another recent snapshot puts the typical new-car bill at $754, a reminder that depending on how the numbers are sliced, the average is either right at or just above that $750 line. For buyers, the exact figure matters less than the direction of travel, which has been steadily upward.

Used cars and longer loans are no longer a cheap escape

For years, shoppers who balked at new-car prices could turn to the used market as a reliable pressure valve. That safety hatch is narrowing. Recent figures show that while used-car payments still trail new ones, they are only “slightly lower,” with typical monthly bills now in the mid-$500s to low $600s according to multiple car payment statistics. When the average new-car payment is around $748, a used vehicle that still costs more than $500 a month does not feel like much of a bargain.

At the same time, buyers are leaning on longer loan terms to keep those payments from climbing even higher. Data on typical auto loans shows that stretching repayment over six or seven years has become common, especially for larger SUVs and trucks that carry higher sticker prices. Tools such as online calculators that let shoppers Estimate and Adjust payments by term show how a longer loan can shave the monthly bill, but the tradeoff is more interest paid over time and a higher risk of owing more than the car is worth if values fall.

Interest rates and credit scores are amplifying the squeeze

Rising interest costs are a big reason why the same car now produces a much larger monthly bill. Recent analysis of new-car financing points to average interest rates in the double digits for many borrowers, with one snapshot citing an 11.40 percent average rate on new-car loans that helps explain why a typical payment can sit at $748 even when buyers make solid down payments. Higher borrowing costs mean more of each check goes to interest rather than principal, which keeps balances higher for longer and makes it harder to trade out of a loan early.

The impact is even sharper for drivers with less-than-perfect credit. Borrowers in the nonprime and subprime tiers, with scores between 601 and 660, or even 501 to 600, are seeing average payments on new vehicles that climb well above the overall mean, often in the high $700s or more. That pattern shows up clearly in recent Average Car Payment and Auto Loan Statistics, which highlight how weaker credit translates into higher rates and larger monthly bills. For households already juggling credit card balances or student loans, adding a nearly $800 car payment on top can push budgets past the breaking point.

More buyers are crossing the $1,000-a-month threshold

As the average payment climbs, a growing slice of the market is moving into territory that once seemed reserved for luxury buyers. Recent data on new-car loans shows that the share of borrowers committing to payments of $1,000 or more per month has hit record levels, with that segment expanding again in Q2 2025 compared with the previous year. Another study described a “record” one in five new-car shoppers taking on monthly obligations above $1,000, a sign that five-figure annual car costs are no longer rare.

Those four-figure payments are not limited to high-end brands. A well-equipped full-size pickup, a three-row family SUV or an electric crossover with popular options can easily reach that level once taxes, fees and financing are factored in. With the average new-car payment already around $748, it does not take much in the way of added features or a higher interest rate to push a buyer into four-digit territory. The result is a widening gap between the vehicles automakers are building and the monthly payments many households can sustainably carry.

Household budgets are straining, but buyers still have levers to pull

The financial stress from these larger payments is already visible. One recent analysis framed it bluntly, noting that “Keeping up with monthly car payments is harder than ever” and pointing to an average new-car bill of $754 as a key reason Americans are spending more on vehicles than they can comfortably afford. When a single car can consume the equivalent of a small mortgage, there is less room for savings, emergencies or other essentials, especially for families that need two vehicles to get to work and school.

Even in this environment, buyers are not powerless. Experts consistently stress the importance of making sure any new loan fits within a realistic monthly budget, a point echoed in guidance that urges drivers to weigh loan size, interest rate and repayment term before signing. Advice on fixed versus variable financing, for example, emphasizes checking that the payment works alongside rent, groceries and other obligations rather than simply chasing the most expensive model a lender will approve, a theme that runs through recent loan guidance.

Practical tools can help translate those principles into real decisions. Online resources that let shoppers Estimate payments based on price, rate and term make it easier to see how a slightly cheaper model, a larger down payment or a shorter loan can keep the monthly bill below a personal ceiling, whether that is $500, $600 or $750. With the average new-car payment now hovering around $748, using those levers deliberately is becoming less of a nice-to-have and more of a necessity for anyone trying to keep their car from overwhelming the rest of their financial life.